The United States online auction service eBay on Friday scrapped all sellers’ transaction fees in China, in an effort to compete with local competitors offering free services, including Yahoo-invested Alibaba.com.
The online auctioneer announced the changes on its China auction website, saying transaction fees would be waived, but small fees would continue to be charged for listing products on the site’s webspace and for “feature” products.
eBay’s China unit, Eachnet, would also require all sellers to provide authorised online payment mechanisms to improve its credit environment, including PayPal and other escrow services, the announcement said.
The move means that sellers won’t get paid until the buyers receive and are satisfied with the products, it said.
The fee cut matches the free services that have been offered by Alibaba’s online auctioneer Taobao, and highlights the stiff competition the US company faces in China.
The US-based internet company Yahoo last year invested $1-billion into Alibaba, while eBay bought out the Shanghai-based Eachnet for $180-million in a series of transactions ending in 2004.
According to the Shanghai Daily, eBay Eachnet had 17,9-million users at the end of the fourth quarter of 2005, compared with Taobao’s 13.9-million users.
However, Taobao saw an increase of 3,85-million new users between September and the end of the year, while eBay Eachnet only registered 2,8-million new users during the quarter.
Taobao.com said on Thursday its online transaction value reached 8,02-billion yuan ($1-billion) last year, seven times the previous year’s level, according to the paper.
Taobao had nearly one million online cyber stores compared with 10 000 cyber stores registered on eBay Eachnet, the Shanghai Daily reported last month.
In 2005, eBay’s international net profit reached $1,08-billion, 39% growth year-on-year, but it was unclear how much of that came from China. – AFP